New York Times speaks out for sales tax fairness

March 27, 2013

The New York Times editorial board today made a persuasive case for online sales tax. It’s a simple matter of fairness, the piece says, and it goes on to point out why the Marketplace Fairness Act works as legislation:

The bill would not impose new taxes but would enable collection of taxes already due under state laws. It also overcomes the objection that sales-tax collection would be too difficult for online retailers. It requires states . . . to harmonize their sales-tax rules (24 states already have) . . . . It also requires states to provide tax-collection software . . . at no cost, which many already do. [emphasis ours]

Interestingly, the Times finds the $1 million small seller exception—which we’ve seen little criticism of elsewhere—to be unfair to small bricks-and-mortar retailers. But they rightly point out that including the $1 million exception is a matter of political expedience:

Unfortunately, the bill exempts retailers who have under $1 million in Internet sales from the collection requirement. That perpetuates the problem, because a bricks-and-mortar retailer is not exempt based on total sales. As a political concession to win swift passage, however, the exemption is acceptable as long as lawmakers commit to continued efforts to level the playing field.

It’s great to see the New York Times speak out so forcefully and cogently in favor of sales tax fairness. Given last Friday’s vote of 75-24 in support of the Marketplace Fairness Act, it seems most members of Congress agree!


Small business owner makes argument for online sales tax collection in NY Times

October 27, 2011
The New York Times: Small Business: "You're the Boss"

New York Times: Occupy Wall Street? Who Will Occupy Main Street?

There’s a terrific new post up on the New York Times‘ “You’re the Boss” blog. Written by Jay Goltz, a small business owner from Chicago, it makes a great argument for online sales tax collection.

We strongly urge you to read the entire post yourself, but we couldn’t help quoting from parts of it:

On browsing in local stores but buying online:

I have a friend who owns a shoe store, and he tells me that people come in all of the time, try on some shoes, spend half an hour with a member of the sales staff, and when they have made a choice they announce that they are going to order the shoes online — as if it is something to boast about. Boasting to your friends is one thing; boasting to someone who has just spent time trying to help you is rude at best. 

On the ultimate consequences of browsing locally but buying online:

What happens if your local retail stores become a showroom for online stores to such an extent that it forces them out of business? Are you perfectly happy not touching and trying out products? It has already happened with the closing of hundreds of Borders book stores. This is not a level playing field — and I say this as someone who has both retail outlets and substantial online sales.

It’s also happened with several Barnes and Noble locations. When one Manhattan location closed last year, the New York Times interviewed several browsers at the store, and most said they liked to visit the store but didn’t buy anything. They preferred to buy online.

On how the loss of sales tax revenues hurts communities:

Zappos does about $1 billion in sales every year. If Chicago represents 2 percent of the company’s business, that would be $20 million in annual sales. That represents about $2 million dollars of sales tax that the city no longer gets — and no longer gets to use to pay for police, firefighters, teachers and street repairs . . . . How much more is being lost on sales by Amazon (which owns Zappos) and all of the other online retailers?

The loss of sales tax, as well as the loss of the real estate and payroll taxes that those closed stores used to pay, is damaging your city and state. This is a zero-sum game. You may think that if a local store can’t compete with Zappos or Amazon, that’s the store’s problem. And you may be right. But why do the rules favor Zappos and Amazon? Not forcing them to collect sales tax has given them an unfair advantage that ultimately will force all of us to pay higher taxes to local governments.

On local stores and the community:

Saving money online can be a pleasure. But these local stores employ your friends and neighbors, spend millions of dollars in your community, and are hardly taking advantage of anyone. . . . Whether it is the local frame shop, furniture store, luggage store, florist, shoe store, bicycle shop, or eyeglass store, many are struggling. If they are doing well, they are not doing that well. Most stores are not ripping people off. They are trying to make a living, give service, support employees and pay taxes — and they are getting challenged by large companies that can buy cheaper but don’t necessarily provide better value.

This is a fantastic post, and we highly recommend that you head over to the New York Times and read the entire thing.


New York Times on the “Amazon tax”

March 14, 2011
The New York Times: Amazon Pressured on Sales Tax

The New York Times: Amazon Pressured on Sales Tax

Have you seen the front page of the New York Times business section? It has an article on the growing number of states that have or are considering affiliate nexus, or “Amazon tax,” legislation.

It’s great to see the “paper of record” picking up on the increasing momentum for online sales tax legislation around the country. Although it focuses on Amazon and its background with affiliate nexus laws, the article also includes a brief but thorough background on online sales tax and nexus.

As always, we applaud states’ efforts to collect the sales tax they’re due, but we continue to believe that a federal Main Street Fairness Act is the best solution for everyone. We’re glad to see that Amazon feels that way, too:

Despite its protests to collecting the sales tax, Amazon supports a streamlined system simplifying the current hodgepodge of state and local levies. But a streamlined system, which has the support of two dozen states, requires Congressional action.


Appeals Court Ruling in Amazon, Overstock vs. New York State

November 5, 2010

The Ruling:  NY_APPEALS_AMZN_2010_11_04_dec.


Ladies and Gentlemen… Start Your Engines!!!

May 11, 2010

Rumors abound that a certain piece of legislation might be introduced this Thursday!

Increasing state-by-state efforts to recover uncollected sales taxes due for most Internet purchases are creating an increasingly hostile compliance burden on multi-state retailers. If you didn’t think the budget problems were enough to encourage federal action on this matter, perhaps this growing body of state-by-state legislation (such as the so-called “Amazon Taxes,” and aggressive reporting requirements) is enough to compel federal action due to the Commerce Clause of the United States Constitution.

Not to mention, our new TaxCloud service (launching July 1) will eliminate all previous concerns related to undue technical or financial burden (its FREE!) as cited in the 1967 Bellas Hess opinion as the only reason for exempting Remote Sellers from their obligations to collect local sales tax. Bellas Hess anticipated technology could eventually solve the administrative burdens of calculating and remitting local sales taxes for every jurisdiction in the land, but even then only Congress has the ability to grant States interstate collection authority. FINALLY, after 43 years, Congress should now act.

As we like to say here at Fed-Tax.net “Shop Globally, Support Locally!”


Response: VoIP & Gadgets Blog

December 28, 2009

Tom Keating from the VoIP & Gadgets Blog over at  TMCnet just posted an interesting, albeit one-sided and slightly misguided piece in response to the New York Times article.  Our commentary follows:

While I appreciate your impassioned response to the New York Times article which comes right out citing the US Constitution, I feel compelled to point out that your citations are in restrictions on the imposition of duties (fees or tariffs) on imports and exports between states.  Sales taxes have nothing to do with import/export fees or tariffs.  An import/export fee is what you see when articles come into, and go out of, the United States, not in between states – as so directed by your citations.

I would like to direct your readers to understand that even if an Internet merchant doesn’t charge you sales tax, you still likely owe the equivalent use tax in your state – which you are supposed to report to your state on your annual tax returns (and remit payment – although most people regularly do neither).

The only reason Internet merchants don’t do this for you (like your local stores do) is that in 1967 & 1992 the issue of “Remote Sellers” came before the US Supreme Court (then in the context of mail order catalog merchants).  In both opinions, the court agreed that remote sellers should collect and remit local sales taxes, but they also conceded that requiring remote sellers to keep track of 4,000+ local tax jurisdictions would be too difficult, and that only an act of Congress could empower the States to require remote sellers to collect and remit sales taxes just as local businesses do.

With contemporary companies like Amazon.com and services like iTunes, no one can legitimately question their technical ability to keep track of many millions of transactions per quarter. Further, with the successes of the Internet over the last 25 years, it is time to revisit how difficult it is for remote sellers to manage a mere 10,000+ local jurisdictions.

Remember:  Sales taxes are decided upon directly or indirectly by you, in the voting booth at every election.  When you vote for local services (police, schools, hospitals, etc) or projects (parks, transportation, sports facilities), these voter mandates are funded almost entirely by local sales tax revenues.  When you avoid  paying these local sales taxes (intentionally or not), only your local community suffers.

It is time to tell Internet merchants to start collecting and remitting local sales tax, just like the corner store has to. Stop pretending that the transaction is “tax-free” because Use tax is still due.

Your local sales tax should be collected and remitted for you by all merchants!  Businesses and individuals should not have to meticulously keep track of all out-of-state transactions, just because keeping track of these local tax jurisdictions seemed so difficult 25 years ago.

As always – we look forward to stimulating some intelligent discussion on these points.